Economic prospects worsen again: 3% decline in 2010

Economic prospects for 2010 are deteriorating again midway through the year, with the wave of flooding overlapping with the shock of the VAT raise and the cuts to public sector workers’ wages, with businesspeople and analysts now revising their calculations and anticipating a contraction of up to 3% in 2010, after everybody was expecting positive growth in spring.

Bad news does not, however, end here – something that nobody wanted to hear, that the recession would extend into 2011, seems a scenario increasingly less likely to avoid.
Nicolaie Alexandru-Chideșciuc, chief economist of ING, was the first analyst on the Romanian market to go public with a new forecast on Monday afternoon, anticipating a 3% contraction of the economy this year, and a 2.2% decline next year. At the beginning of the year he expected an almost 3% economic growth for 2010.
Florian Libocor, chief economist of BRD-SocGen, is more optimistic, expecting this year’s economic growth to range between -0.5% and 0.5%. He says the economy will remain under strain, and that recovery in 2010 is out of the question.